5 Ways Small Businesses can Weather Uncertain Economic Times

With regular life all but suspended and so much uncertainty, small businesses will most definitely feel the impact. Although most of it will occur in the short term, it could well have long-term impacts, lasting far beyond the next several weeks. That means it’s time to hunker down and get serious about the situation to minimize any potential damage.

5 Ways Small Businesses can Weather Uncertain Economic Times

The very first thing to do is to review all expenses. Not just some or the top, but everything. You’ll likely be reminded of at least one that’s either unnecessary or simply too costly to maintain in its current status.

In an uncertain economy when every penny counts, even the smallest increase in revenue or reduction in expenses can have an impact on company profitability. The good news is a large-scale company overhaul isn’t necessary. It’s often simple, common sense steps that improve the bottom line, especially for a small business. Q1, 2020 is a good time to step back and look carefully at your business practices. —American Express

Then, it’s time to start to reduce discretionary spending. Here again, don’t just settle for around the margins. Instead, think about where you can cut when it comes to discretionary spending. You’ll probably be surprised by how much you’re wasting and don’t even realize it.

More Ways of Dealing with an Economic Downturn

Of course, those two things won’t do it alone. While reviewing expenses and cutting down on discretionary spending will most certainly help out, you’ll probably be able to do more — a lot more. For instance, you can do the following:

  • Buy more carefully. This is different from discretionary because these entail essentials. Although these things are necessities to run your business, you can probably get away with buying a little less. Doing so across a few or several items will have a cumulative savings effect that will make a real difference.
  • Cut down on extras. Overtime, perks, even benefits are all part of this particular category. (You should be doing this periodically, about once to twice per year, anyway.) Again, you’ll likely be a bit shocked by how much these items are costing you, especially when added-up together.
  • Consider cutting pay. This doesn’t just apply to your employees, but you as the owner, as well. Yes, you. It might be necessary to reduce team member hours, and even take a temporary pay cut yourself. This will not only help you weather the storm, but also, it shows real leadership. Moreover, it sends a clear message that you are part of the solution, rather than part of the larger problem.
  • Innovate. Huddle up with your key employees and leaders and challenge everyone with to come up with 2 or 3 innovative strategies to create or capture new revenue sources that you are currently not generating. Many successful businesses have found way to survive and in some cases developed entirely new services and products that resulted from innovating during difficult times. Necessity is the mother of invention. Plato.

What other measures would you suggest? Please share your thoughts and experiences by commenting!

Interested in learning more about business? Then just visit Waters Business Consulting Group.

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Entrepreneurs Beware! Upselling will Undermine Your Business, So Do This Instead

Entrepreneurs Beware! Upselling will Undermine Your Business, So Do This Instead We’ve all experienced it – visiting an electronics chain to purchase a single item. Something you want and you’re excited to use. Reaching the checkout counter, an uneasy and annoying feeling begins to creep up. Just wanting to complete a simple transaction, you present your payment, only to be asked if you’d like to add a warranty. Then comes the follow-up savings pitch – you could save a significant percentage if you open a new credit card. Declining both, you walk out, disappointed but unsurprised at what could have been a good experience. The figures don’t lie. Retailers often earn more upselling add-ons than the margins on their products. It’s why consumers have to endure these unwelcome offers time and again. Such encounters persuade people to skip the physical store and just order what they need online to mitigate the upsell tactic. After all, it’s much easier to swipe or click past such offers than to tell another human being “No.” Now, apply this mindset to your own business. Upselling may seem like a tempting strategy to boost your revenue, but it could be the very thing that undermines your sales. Instead of pushing more products or services onto your customers, you should focus on building genuine relationships and delivering exceptional value. Why Upselling Hurts Businesses Let’s face it – most people, whether retail employees or skilled tradespeople, don’t relish upselling customers. It’s uncomfortable because they’ve been in the same position too. Like everyone else, those individuals also endured the awkward upsell and don’t want to be required to do the same. Worse still, upselling, when done improperly, can harm a business. But, that’s not all; upselling can be counterproductive for several reasons. For instance: Customer trust. Aggressive upselling or misleading customers into purchasing more expensive products can erode customer trust. Customers value honesty and transparency from businesses. If they feel a company is trying to take advantage of them through upselling, they may lose trust in the brand and choose to shop elsewhere. Negative experience. Here’s the most obvious reason. Overly pushy or frequent upselling can create a negative customer experience. Customers may feel pressured or annoyed by constant attempts to upsell, which could lead to dissatisfaction and potentially drive them away from a business. Unmet expectations. Upselling can sometimes lead to customers purchasing products or services that don’t meet their expectations or needs. This can result in dissatisfaction and negative reviews that can harm a business’s reputation. Lost sales. If customers feel they’re being upsold too aggressively, they may decide not to make any purchase at all. This could result in lost sales for the business and bad word of mouth from dissatisfied customers too eager to share their negative experiences with others. Resource misallocation. Focusing too heavily on upselling can divert resources away from other important areas of the business, such as customer service or product development – two positive and helpful things. Damage to brand image. This bears repeating, if a business gains a reputation for aggressive or misleading upselling, it could damage its brand image and make it harder to attract new customers. To avoid these pitfalls, businesses should focus on providing value to their customers, rather than just trying to increase sales at any cost. This means only offering upsells that genuinely benefit the customer and being transparent about the value of the upsell. Better yet, instead of upselling, try upserving. 7 Compelling Reasons to Upserve Instead of Upsell You may have heard the term “upserving” before. Regardless if you’re familiar with it or not, it’s a great alternative because it puts customers’ needs first. So, businesses should focus on upserving their customers instead of upselling for many compelling reasons: Customer satisfaction. Upserving means providing more value to the customer. Again, this could take the form of offering a product or service that genuinely meets a need or enhances their experience. When customers feel that a business is looking out for their best interests, it increases their satisfaction and loyalty. Long-term relationships. Upselling can sometimes feel like an annoying sales tactic, one that can erode trust and damage the long-term relationship with the customer. On the other hand, upserving builds trust and fosters a stronger, more positive relationship. Positive brand image. Businesses that focus on upserving are seen as customer-centric and trustworthy. This enhances the brand’s image and reputation. What’s more, customers are much more likely to make referrals based on such positive experiences. Increased sales. While upselling can increase sales in the short term, upserving can lead to even greater sales in the long run. Satisfied customers are more likely to make repeat purchases and recommend the business to others. Customer retention. Upserving helps to retain customers. It’s much more cost-effective to retain an existing customer than to acquire a new one. When you upsell, you run the risk of losing a customer because they feel like you’re putting your bottom line before their needs. Differentiation. In a crowded market, upserving can be a key differentiator. It sets the business apart from competitors who may be more focused on upselling. Customer Lifetime Value. Upserving can increase the customer lifetime value (CLV). CLV is a measure of how much a customer is worth to a company throughout their relationship. By upserving, businesses can increase this value. 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